Early Retirement Extreme Forums

*Disclaimer: I'm not very well-read on this subject and would welcome reading material suggestions.*

ERE2 the way I understand it is about increasing social capital between EREmites. If that is the case, a goal might be to have social capital circulate more intensively. How can that be done? Some random thoughts:

- There might be parallells to the velocity of money.
- Could one make social capital more explicit and/or visible to stimulate its use?
- Many EREmites probably want to align increased use of social capital with a decrease in use other requirements like financial capital or ecological footprint as part of their web of goals.

I also wrote out a few not-so-random thoughts about social capital. Stating the obvious really, but formulating my thoughts did help me:
- Social capital in many ways is more volatile than cash. In that way, it more resembles a stock portfolio than money. On death for example, social capital mostly dies. Or former Wirecard COO Jan Marsalek's social capital with WEF Davos visitors is not what it used to be since he reportedly became a Putin protege.
- Social capital is also much more complex than financial capital. Allowing someone a certain social capital means you're prepared to share something with that person. That could man financial capital, labour, physical things, expertise, social referrals, or others.
- Social capital is also hard to quantify. You might be willing to give away all your financial capital to life partner, child or parent. Or you might be willing to donate 1€ to a respectable non-profit for a sticker, if they ask.
- Negative social capital is a thing: "I'd rather die than help this person in whatever way.", "The owner of this cafe kicked out a well-behaved customer just because he was black. I'd rather go to the one next door."
- You might be willing to share social capital with a specific person in a limit area only. Their area of expertise, say. An example. Maybe you choose to support someone starting a business by taking your business there.

Again, my main reason for having written this out is I'm on the lookout for decent quality reading materials. Hints appreciated!

@loutfard: Addressing your questions via circuitous rant as is the custom of this forum! Note that this is not the first social capital thread on this forum so some of my rant addresses my mental conglomeration of older threads.

I think taking money = financial capital as the baseline capital which all other capitals are compared to is a mistake.

I propose that each form of capital can be tied to a specific set human needs.

Money is the abstraction of economic capital, economic capital being goods or services provided by "the economy," into one uber-commodity.

I propose that financial/ economic capital is the capital of what I've termed "needs of modernity."

Social capital is the capital of social needs.

I propose that each capital, with its resulting yield and flow, is best at satisfying the needs which fall into that category. Social capital is best at meeting social needs.

Categorization however, is invented and non-rigid. Social capital can be used to meet other needs.

When people on this forum talk about "social capital" it seems to me like they want to talk about social capital according to the rules of money and for the explicit purpose of meeting economic needs.

What are economic needs though? They are largely invented needs of modernity, interspersed with other underlying human needs that we largely meet with some mechanism of modernity through the financialized economy of goods and services.

What happens if I invert this and ask how well money meets social needs? How does it feel to pay for ones friends? To pay for attention or attraction? How about paying a bunch of actors to come to a dinner party? Don't forget to optimize for interesting conversation!

However, money can be used to increase social capital. Things such as generosity, access and optionality can be purchased with money. However, this is not simply purchasing social capital or using money to meet social needs. It is more accurately, the interaction of capitals that acts as a capital multiplier and less so the hoarding and use of one capital and its disbursement in another domain that builds interdimensional capital stocks or increases their yields (the meeting of needs in each domain).



So I propose the way to increase social capital is to increase social skills. The way in which one should go about this is determined by the individual and their initial skill level. As with increasing financial capital, the problem may be behavior, education-level, current location, inner-demons...

The way to increase economic capital by increasing social capital is to increase social capital and then think about the intersection of social and economic capital and how these areas reinforce each other.


The way to increase the flow of social capital between forum members is to either increase social interaction among forum members or increase forum social skills (we will still need some interaction for the latter to come to fruition).

@Jin+Guice:

Great post!

Jin+Guice wrote:I think taking money = financial capital as the baseline capital which all other capitals are compared to is a mistake.

Yes, but even in our choice of the term "capital" we are already there. The field of economics in the modern era was molded towards resembling physics, in the hopes of achieving some of that field's level of success. So, when we go one step further and apply the economic model to the personal or social realm, it may become very mechanistic, and since a social system isn't really just like a mechanical system, the model can definitely falter or fail completely.

One of the simple models often used in couple's therapy may illustrate this. The suggestion is made that exhibiting positive behaviors in relationship is like filling up your partner's Love Jar. The problem with this mechanistic model is that it encourages covert contract; if I just keep exhibiting what I would view as positive behaviors then eventually my partner's jar will overflow with whatever I hope they would like to share with me. This can be extended to the less intimate levels of relationship in the form of the neighbor who expects you to be grateful for the bag of overgrown zucchini they left on your porch and the superior advice on technique you offered when you were painting your fence.

I propose that each capital, with its resulting yield and flow, is best at satisfying the needs which fall into that category. Social capital is best at meeting social needs.

Yes, and I think this is kind of like recognizing that electricity is best used for providing information needs such as powering a light bulb so that you can see well enough to read or keeping your phone charged. It is too valuable to be wasted on tumble drying your clothes, although it may be the case that an electric blanket applied directly to your body is a better choice than heating the entire house with natural gas.

On the other hand, I would make the point that this somewhat implies that those who do possess better social skills, often females for reasons having to do with the social behavior mediating influence of estrogen, should not expect to be renumerated for these skills in a market that is largely Capitalistic. For example, most humans would prefer to interact with a nurse who is kind as well as competent, but in our culture we don't tip nurses as we do waitstaff, so kind behavior by nurses may not be appropriately or efficiently rewarded.

IOW, I would suggest that it's only within the context of a post-Capitalist or trans-Capitalist society that social capital can equitably be alloted to its best usage. This would also be a world in which members of both gender were equally encouraged and expected to develop their social skills as well as their other competencies. For example, in a notable novel I recently read, an ambitious young man graduates from an Ivy League University, take a highly renumerated position as a consultant with an organization in Singapore, but then completely leaves this trajectory when a tragic accident befalls his family of origin in order to provide practical and emotional support. Then after a few years, when his family is back on an even keel, he reboots a career for himself in another direction. When somebody implies that his behavior in abandoning career trajectory in favor of devoting his energy to family of origin is self-destructive, another character notes that it is actually feminist behavior.

Unfortunately, it may be the case that the only means by which to equitably value pro-social behavior with a Capitalistic structure would be to bring all forms of pro-social behavior to the market. For example, to make the mental exercise in which all the activities of a homemaker are assigned a market value to reality. I would guesstimate that we are already about halfway there, and the moanings from the Man-o-sphere will increase in volume until suddenly the flip will occur and something altogether new may emerge.

Something to note is that social capital can facilitate access to resources otherwise illegible and not directly accessible by (financial) capital.

Trading in favors is one such way this is accomplished.

loutfard wrote: ↑

Sun May 12, 2024 3:20 am

Again, my main reason for having written this out is I'm on the lookout for decent quality reading materials. Hints appreciated!

You can start here. I think the original post in that thread links back to an additional discussion on social capital in a WL6---WL7 thread:

viewtopic.php?t=11998

It has been a while since I've read a lot on the topic, but Bowling Alone by Robert Putnam is a classic on Social Capital (in the US). He wrote a follow up to the book that I haven't read yet, called Better Together.

http://robertdputnam.com/bowling-alone/

He defines social capital as "connections among individuals – social networks and the norms of reciprocity and trustworthiness that arise from them."

Alexis De Tocqueville was one of the first to document a unique feature in American life and democracy - a strong inclination towards civic participation and community. His book, Democracy in America (1835), is a beast but a classic in American political thought and sociology. Jane Jacobs was one of the first modern writers to refer to social capital, as used by Putnam, in her classic The Death and Life of Great American Cities. She only uses the term a couple times in the book, but explores how the built environment influences social capital, and the strength of the community in general.

It is probably worth pointing out that Putnam (and Jacobs) are looking at social capital from a broader, sociological perspective. They recognize and discuss how neighborhoods and communities with high levels of social capital benefit individuals, but their primary interest is how it affects the broader community. How do declines in social capital affect our trust in civic institutions, crime, business, and public health?

I think a lot of the posts on the forum are looking at social capital from an individual perspective. I haven't read Pierre Bourdieu, but this seems to reflect his perspective. He looks at it as a resource for the individual rather than a resource for broader society.

From Wikipedia:

Social capital
For Bourdieu, "social capital is the sum of the resources, actual or virtual, that accrue to an individual or a group by virtue of possessing a durable network of more or less institutionalized relationships of mutual acquaintance and recognition." In order for individuals to gain such capital, they must work for it constantly and it takes time according to Bourdieu. For some families, cultural capital is accumulated over a period of generations as they adopt cultural investment strategies and pass them on to their children. This gives children an opportunity to realize their potential through education and they pass on those same values to their children. Over time, individuals in such families gain cultural currency which gives them an inherent advantage over other groups of people, which is why there is such variation in academic achievement in children of different social classes. Having such cultural currency enables people to compensate for a lack of financial capital by giving them a certain level of respect and status in society. Bourdieu believes that cultural capital may play a role when individuals pursue power and status in society through politics or other means. Social and cultural capital along with economic capital contribute to the inequality we see in the world, according to Bourdieu's argument.

I'm not sure how much of this is of interest from a European perspective, but it is worth pointing out that there are some pretty specific concepts and definitions in the academic literature. This doesn't necessarily align with the manner in which we've talked about "social capital" on the forum.

Jin+Guice wrote: ↑

Sun May 12, 2024 1:13 pm

I think taking money = financial capital as the baseline capital which all other capitals are compared to is a mistake.

7Wannabe5 wrote: ↑

Mon May 13, 2024 7:44 am

Yes, but even in our choice of the term "capital" we are already there.

It is probably worth thinking about the motivation and purpose in using some of that terminology.

If someone is trying to affect change in the social, natural, built or political environment they often need to use terminology and logic that appeals to those in power. This is usually those with political or business power. Framing social or environmental issues within an economic context is a means to an end. When elected officials can grok the value of the neighborhood pub, local wetland, bike path, or public plaza in both economic and social terms, they are more likely to preserve those things.

The question, at least in my mind, is what are we trying do or accomplish with the terminology? Is it discussing ideas, refining theory, and approaching a more nuanced level of truth? Or is it making some kind of change in the broader community? Maybe it is both?

I see a similar trend in terms of putting an economic value on the natural environment and ecosystems (cultural or natural capital). There has been a lot of compelling research on ecosystem services to better inform elected officials at the national, state, and local level of the benefits that ecosystems provide. Putting a dollar figure on the prairie, wetland, forest, riparian buffer, or network of street trees might feel dirty, but it probably represents the best way to make things a bit better (or stop destructive things from happening in the first place).

This doesn't mean that those that use those phrases or concepts don't value nature or social networks for their respective, inherent worth. It might just represent a pragmatic approach to preserving or improving them within the existing economic and cultural paradigm.

Western Red Cedar wrote: ↑

Sat May 18, 2024 11:49 pm

How do declines in social capital affect our trust in civic institutions, crime, business, and public health?

Social capital is a benefit of participation in a community web (of goals?). Right now, the participants in community webs who are able to grant benefits outnumber young people entering the organizations, so the social benefits accrue to a smaller group. Think of the retiring small business owner who sold her profitable business for a token amount to the young person she knew from church or rotary or little league.

Those organizations also provided the informal extra-familial safety nets of the community that are now being taken over by more formal structures like courts, schools and healthcare systems. My father was not only the coach for most of my sports teams throughout the 1970s, he was also the adult male role model for some of my peers whose own fathers were not willing or able to step up. That shift from informal nudges to formal institutionalizations has profound effects on those being "helped".

The points about the language and terminology being used are good ones. Language will frame the idea a certain way, and people will understand and react to it differently as a result. As @WRC pointed out, it's probably useful to speak the language of business and political leaders if one wants to affect changes in those realms. Social capital is probably a great term in this case, because those folks understand capitalism, and social capital is analogous enough to financial capital that it works. In the "peace and free love" crowd, however, uttering the words "social capital" might be met with a reaction like "Ew, gross! You can't treat people like money!!!". Similarly, one would probably be laughed out of a boardroom if one suggested something like "human connectivity for the betterment of all" be considered alongside profits. There's even a model for understanding different common perspectives, but ironically some here objected to using the language of that paradigm.

I'm not widely read on the subject, but Keith Ferazzi's Never Eat Alone is a manual on building social capital.